i would like to introduce sheila bair, chairman of the federal deposit insurance corp. for the purpose of an opening statement. thank you for coming today. >> thank you for the opportunity to testify on the banking industry and federal deposit insurance corp. and future challenges to our economic and financial stability. much has been written and said about the recent financial crisis and the factors that led up to it. my written testimony summarizes four factors that i consider the most important. excessive reliance on debt financing, misaligned incentives and finance legal and regulatory arbitrage and inadequate framework that allows financial companies to become too big to fail. the fdic was created in 1933 in response to the mysterious financial crisis in american history. our mission is to promote financial stability and public confidence for bank supervision, deposit insurance and the orderly resolution of failed banking institutions. working with regulatory counterparts the fdic has played an instrumental role addressing the recent crisis. our actions helped rest

sheila bair is stepping down as chair of the f.d.i.c. at the end of her five-year term. her last day is july 8. as one of the government's top bank regulators, bair helped craft the response to the financial crisis. alex sanchez of the florida bankers association says bair's successor still faces many challenges. he hopes it's someone who knows the banking industry. >> this is a position that the president appoints, and that person has to roll up their sleeves and get to work. i think that's an important attribute. and certainly someone who has the experience of the f.d.i.c. would be an excellent choice. >> tom: standard & poor's has again cut greece's credit rating, downgrading it by two notches and raising new fears about the value of greek bonds. the new rating is the lowest yet for greece, and it's six notches below investment grade. it comes after european officials acknowledged for the first time that last year's bailout package for greece was insufficient. the powerful tornadoes and storms that struck the southeastern parts of the u.s. last month caused up to $5.5

chairman bair also mentioned this. the rate that the new legislation addresses this at a number of levels including enhanced oversight, tough capital liquidity requirements and getting rid of too big to fail would be a very important step. more generally, the philosophy of dodd-frank which is to encourage a systemic macroprovincial approach to regulation where broad systemic risks are taken into account as well as individual firm or market risks is ann portales debt and one that is being adopted globally as well as the united states. >> would be harmful to repeal the there's a lot of work going on now that is moving towards ending too big to fail. the tools are there, the implementation capability is there and i wouldn't want that work to be diverted, and i think that we pealing and trying to reverse back to the process we know bankruptcy doesn't work. and so that will be an open invitation to the more bailouts if there is no alternative to that. so, we are working very hard to implement this authority to convince the

chairman bair also mentioned this. the rate that the new legislation addresses this at a number of levels including enhanced oversight, tough capital liquidity requirements and getting rid of too big to fail would be a very important step. more generally, the philosophy of dodd-frank which is to encourage a systemic macroprovincial approach to regulation where broad systemic risks are taken into account as well as individual firm or market risks is ann portales debt and one that is being adopted globally as well as the united states. >> would be harmful to repeal the there's a lot of work going on now that is moving towards ending too big to fail. the tools are there, the implementation capability is there and i wouldn't want that work to be diverted, and i think that we pealing and trying to reverse back to the process we know bankruptcy doesn't work. and so that will be an open invitation to the more bailouts if there is no alternative to that. so, we are working very hard to implement this authority to convince the

i look forward to hearing from chairman bair about this. although i understand the need to replenish the fund, i think this could have an instant -- unintended consequence of not having enough funds for lending. we need to find a balance and to ensure we have a safe and sound deposit fund with -- without ceasing lending. i am interested in hearing what the agencies are doing. we need to ensure that new regulations provide enough flexibility for small institutions to meet the needs of their customers and not be encumbered by a one-size-fits- all regulation geared to the largest institutions in our nation. a diverse financial institution is good for all market participants. i am interested to hear how the fdic will work with the consumer protection bureau. finally, i would like to touch on the liquidation of authority granted to the fdic by the dog- franc act. i know the chairman sincerely believes that these powers -- that these institutions are too big to fail. but i would prefer to see a different form of resolution where there is no taxpa

i look forward to hearing from chairman bair about this. although i understand the need to replenish the fund, i think this could have an instant -- unintended consequence of not having enough funds for lending. we need to find a balance and to ensure we have a safe and sound deposit fund with -- without ceasing lending. i am interested in hearing what the agencies are doing. we need to ensure that new regulations provide enough flexibility for small institutions to meet the needs of their customers and not be encumbered by a one-size-fits- all regulation geared to the largest institutions in our nation. a diverse nancial institution is good for all market participants. i am interested to hear how the fdic will work with the consumer protection bureau. finally, i would like to touch on the liquidation of authority granted to the fdic by the dog- franc act. i know the chairman sincerely believes that these powers -- that these institutions are too big to fail. but i would prefer to see a different form of resolution where there is no taxpaye

there is one exception to that rule, and that would be larry bair. i hear that your ringtone is "we are the champions," and that one is ok with me. speaking of larry, the giants were pleased to share with us the world series trophy. [applause] the giants have brought so much to this city, sharing with us this incredible trophy. it is just outstanding. it will be at the giants' boost today when we have a break -- booth today when we have a break. you can take a few photos. but do not take it home with you. you'll be hearing from me from time to time today, so i will keep this short. to kick off our events and provide welcoming remarks, allow me to introduce our newest rock star -- mayor ed lee. has shown that he is a natural for the job. i have been closed to him for decades. he is the head of the human- rights commission. he went on to become the city purchaser. mayer brown appointed him to be the director of public works, and he spent several years as city administrator. i never would have thought that ed lee would be mayor of san francisco. because

chairman bair also mentioned this. the rate that the new legislation addresses this at a number of levels including enhanced oversight, tough capital liquidity requirements and getting rid of too big to fail would be a very important step. more generally, the philosophy of dodd-frank which is to encourage a systemic macroprovincial approach to regulation where broad systemic risks are taken into account as well as individual firm or market risks is ann portales debt and one that is being adopted globally as well as the united states. >> would be harmful to repeal the there's a lot of work going on now that is moving towards ending too big to fail. the tools are there, the implementation capability is there and i wouldn't want that work to be diverted, and i think that we pealing and trying to reverse back to the process we know bankruptcy doesn't work. and so that will be an open invitation to the more bailouts if there is no alternative to that. so, we are working very hard to implement this authority to convince the

bair osudans stl there. th iccould likeim. haseen charged on vario acunts. t thfact is thatsurely it depends on what haens with the nflict in libya. doesn't it? >> well, i think that's fair poin the other trials if these were t icc tals with mi osevitch and taylor. theyere othinternational courts. t i think the pot is that these indivials icreangly in tay'sorld if accud of the mosseriousrime have a way ofindi themlves in the dark. think if there are arst warrants issued and this is a judicial proce, an up the judg toeighhe evince d cide fair wheer or no t iue the warrants. but if ey are isued, i think the trend is spite the uncertainty or unpredictability,ncreing numbs ofeaders are winding up atrial. >> do you think there a danger that such an arrest warrantcan b cnter productive in that colonel ddafmea thi, ok we ma nowigh to the deh because if i se this i'm goin to end up in front of the icc? should they issue warrants afr the eves aresort out? >> fair question. but thinhe conventional wiom really theonventional wisdom you cit out wait for things to sort o

>> first i want to join my colleagues in thanking you, chairman himelfarb bair. i wish you well and the next chapter of your life and will continue to ensure many of us look to your advice. one of the things i wanted to pursue in deputy secretary wolin, it's appropriate to ask you about this and that is if we turn the clock back a year and a half, there was another continues to be a real challenge in terms of lending capacity at a lot of work community banks. in wrestling with this and talking to many, many experts and stakeholders, we produced a planned called small business lending fund, which was to essentially counter the irrational fear that follows irrational exuberance. how's that we fear related to capitalizing community banks? that capitalization is leveraged provided to 300 billion community bank lending. that was some game that was amended into small-business jobs bill in a bipartisan fashion. everything's coming coming to me now that are applying and saying there is no sign of the treasury is ever going to respond to applications. it just seems like t

sheila bair testifies about financial regulation in the banking sector. later a kentucky senator on the patriot act. >> on tomorrows "washington journal, we will discuss the u.s. supreme court decision requiring california introduced the prison population. republican senator john will speak about the house gop proposal to make changes to medicare. after that, douglas brinkley joins us for a segment about the world war ii memorial. it is each morning at 7:00 a.m. eastern. a member of the palestinian legislative council discussed the recent unrest in the arab world and what it means for the middle east peace process. >> the c-span video library makes it easier to follow campaign 2012. get instant access. it is all searchable and free. the video library is washington your way. >> are the three day memorial day weekend, commencement addresses from across the country. leaders from across entertainment offer their advice and insights to the graduating class of 2011. it is memorial day weekend on c- span. >> juan williams talks about his experiences as a journal

i look forward to hearing from chairwoman bair on this important an ongoing issue. thank you. >> i would like to recognize our newest member, mr. kantor from tennessee, for one minute for the purpose of an opening statement. -- mr. fincher from tennessee, for one minute for the purpose of an opening statement. >> as the newest member of the financial services committee, we are pleased to have the opportunity to deal with, hopefully, what will be the things that are going to fix the problems in the future. i was not in congress in 2008 when the financial crisis and war across the committees of our district. as a small-business owner, i felt it's a fax first hand as the bottom dropped out of our economy. one major principle i did take away from those days was the asset to credit is of vital in helping our small businesses of gen. until our financial institutions are allowed to responsibly do their jobs again and own money to qualified borrowers, we are not going to seek business is creating new jobs again, thank you for your service. i lookorward to hearing what you h

. >> i'm dina bair and we welcome our viewers on wgn america and watching us on the web. our top stories judy wang is live with the investigation . >> good afternoon. continue to go in and out of the store and police have been no arrests classifying this as a death investigation but a new tenant at the scene says this appears to been the result of a robbery. one of the stores regular customers was here when the body was found he said he knew something was not right when the store did not open at its regular time. . >> i knew something was wrong so one of the owners came and he opened the door and him and the security guard when an it went to the back which cannot see from the front of the store and when they came back heights all looks on their faces as something was wrong. for them not a 200 block of south wabash and employer arrived at about 8:00 this morning and discovered a body in the back room. he had been shot in the head it is not known when the shooting occurred. investigator tell us please expect it was a robbery because some property was missing but he refused

the anchor of special reports bret bair joins us live from washington.questions to be asked at the press briefing today. what do you expect we'll get to first? >> reporter: i think, martha we'll see a lot of questions about the burial at sea. there are people asking all kinds of questions about why this had to happen the way it happened, getting word from administration officials that his body was prepared on the u.s. s. carl vincent, osama bin laden's body in accordance with islamic practice, he was washed and wrapped in a white sheet before being buried at sea at 2:00am this morning. his body, according to them was prepared on a tphrad board then eased into the sea. there are a lot of people out there who say, okay, we have the dna test from administration officials saying it's near perfect match, near a hundred percent that it was in fact him. we had the facial recognition according to administration officials by the operators on the ground, matching what the cia had as far as his face, and an identification by one of his wives, apparently during the

and nobel prize winning economist from "the new york times," paul krugman, fdic chairwoman, shiela bair former deputy treasury secretary roger altman. thank you all for being here. this seems to be a never ending conversation but the limit we're picking up again. how is president obama to respond to the call for trillions, not billions of dollars in cuts? >> i think he cannot -- if he gives in on this, he's setting himself up for repeated blackmail. he's basically saying i care about the economy, more than the republicans do and therefore, every time they threaten to blow it up. even though it hurts all of us, i give in. obama has very little wiggle room even though it's a terrible thing. >> lots of economists saying the republicans are playing with fire. exceeding the debt limit, hitting it is not like shutting down the government, it's causing a cascading economic crisis. >> the key is to recognize the limit is the symptom and fundamental problem is the underlying condition of the u.s. budget. what you're seeing now are calls, both from speaker boehner and senate minority leader, mitc

bair to capitalize in a positive way on the street -- failure to capitalize in a positive way with the mistake of significant proportion. the importance of global events we witness each day it is astounding. these events are forcing strategic decisions to be made at a more rapid pace than ever before, and will clearly need an increasingly more proactive engagement strategy to prevent future conflicts and to meet the challenges of our smaller, but more globalized world. the 21st century requires that we rethink the 20th century ways. it will continue to be necessary, perhaps as never before. i'm very optimistic that this can be done. in times of crisis, america has always found the solution to its most serious and pressing challenge. make it always be so. thank you very much. [applause] >> thank you very much. we will begin with the questions coming from our audience. osama bin laden is the most pressing news story of the past several weeks. that is the area where we began bread on the question of pakistan, how can the united states -- he talked about trying to make a renewed effort, bu

bair innovative ideas and approaches closest to the patient are not only going to solve problems, they d.c. [applause] in washington, d.c. i will remind the federal bureaucrats that government exists to serve its citizens, not its employees. [applause] and the truth is, people getting paid by the taxpayer should not get a better deal than the taxpayers themselves. [applause] that means freezing federal salaries, transitioning federal employee benefits, and downsizing the federal work force as it retires. it means paying public employees for results, not just seniority. he means from the capital to the classroom and everywhere in between, we will make public employees more accountable in their pay and benefits more in line with a rest of the taxpayers in this country. [applause] and in the private sector, it means no card check, not now, and not ever. [applause] and that means no taxpayer bailout just because you made big campaign contributions to politicians or just because you made a lot of money and gave away to people who are trying to influence our government. we also need to make

"bair plans to leave her post." also this morning, the front page of "the wall street journal" this morning has the story. host: also, some of you might be interested in this headline this morning. "the pakistani leader sides with military." "the price minister defended the country's military -- the prime minister defended the country's military." we have that at c-span.org. you can watch the speech. let's go to dayton, ohio. tom, an independent. go ahead. caller: with all the outrage we have over ge not paying taxes, how can anybody say that taxes are too high? if we were going to a war or something, democrats and republicans would get together and take care of it. why can't the democrats and republicans, who are both goting -- why can't they into the house and go in and take half of their money and do that to every corporation? host: "the new york times" editorial weighs in on rail funds. he claimed he was doing a huge favor for the national treasury. let's go to seattle. david, a democrat. what did you make of sp

. >> bair ready, how are you sure it will work? -- being ready, how are you sure it will work? >> there is risk in everything we do. what we need to do is manage that risk to make it highly improbable that those accidents will never happen again. that is what we are doing with contemning technology, with 70 practices, and the new regulatory regime. -- with safety practices, and the real tory regime. we're doing everything -- and the new regulatory regime. we're doing everything we can. >> thank you. we are back with our reporters. let me begin with where we left off with jack girard. you're asking can another spill be contained? >> i heard there was some risk. there's risk in any thing -- in everything, and i think he was right in that point. people want a very small level of risk. these containment systems are new to the industry. we have not seen them tested across a myriad of conditions. the industry is the first to point out that each well is different. the true way to stop a well is to kill it with a relief valve and that takes some time. time will tell. i think a lot of p

the guest is south carolina governor nikki haley and coming roundtable discussion with sheila sheila bair, former c.b.o. director douglas hotel egan. chris wallace welcomes congressman ron paul and later senate majority whip dick durb an and republican senator jon kyl. at 3:00 p.m., it's cnn's state of the union and candy crowley. talks with mitch mcconnell, paul ryan, former director of national intelligence, retired admiral dennis blair and john negroponte. at 4:00 p.m. eastern, hear "face the nation" from cbs. host interviews john boehner and more from the cbs town hall meeting this week with president obama. the five, in -- network t.v. talk shows are brought to you as a public service by the networks and c-span. 2:00 p.m., fox news sunday, at 3, cnn's state of the union and at 4:00, face the nation from cbs. listen to them all on c-span radio, xm satellite channel 119 or listen online at cspanradio.org. >> how do these people become transformed, what series of choices do they make to kill hundreds of thousands of people? >> in his new book, "mastermind," richard minite looks at the a

a gw, now hhs and the secretary bair, caspar weinberger, turned me down. he said well i think i can help you with that, because senator goldwater has weinberger's budget. [laughter] he says you come down to washington and i will take you to see senator goldwater. he took her to see senator goldwater and goldwater looked at her and said, ganz cooney. are you from arizona? she said, yes. are you related to harry ganz? she said he is my uncle. he threw his arms around her and he said, harry ganz gave me my first contribution when i first ran for office. what can i do for you? [laughter] >> it is just amazing how much washington has change. [laughter] >> senator goldwater picked up the phone and said to joan finney, we have got your money. that is how sesame street when national. that was senator goldwater. why are the republicans today, it baffles me, because public broadcasting should be totally nonpolitical. >> berra bozen julius i want you to jump into this too because if we are going to have a fire we might as well all go into it but there are those today

. >> chairwoman bair, i think you for being here, for your testimony and your service to our country. the one question i asked before several other people already asked. so i am going to move to another topic. it regards the orderly liquidation authority. i know several times in your testimony today, you talked about you believe -- or at least the impression i got was you believe the fdic have authority over liquidation is better than bankruptcy. >> for financial institutions. >> for financial institutions. there are a number of people in the bankruptcy community that believe that if bankruptcy laws changed that bankruptcy would be better. i know a lot of it deals with derivatives. can you give me some ideas of thoughts where you might believe that bankruptcy would be better? one of the issues with bankruptcy is that we are looking out for the creditors as we wind things down. i would like to hear your thoughts on some things that could be changed in the bankruptcy code that would actually make bankruptcy better. >> i think you are right. how derivatives are traded is very important.

. >> chairwoman bair, i think you for being here, for your testimony and your service to our country. the one question i asked before several other people already asked. so i am going to move to another topic. it regards the orderly liquidation authority. i know several times in your testimonyoday, you talked about you believe -- or at least the impression i got was you believe the fdic have authority er liquidation is better than bankruptcy. >> for financial institutions. >> for financial institutis. there a a number of people in the bankruptcy community that believe that if bankruptcy laws changed that bankruptcy would be better. i know a lot of it deals with derivatives. can you give me some ideas of thoughts where you might believe that bankruptcy would be better? one of the issues with bankruptcy is that we are looking out for the creditors as we wind things down. i would like to hear your thoughts on some things that could be changed in the bankruptcy code that would actually make bankruptcy better. >> i think you are right. how derivatives are traded is very important. we would